HUDSON-TROYTOWERS APARTMENT, CORPORATION v. HEALTHY DOZEN CORPORATION

NOT FOR PUBLICATION WITHOUT THE
                        APPROVAL OF THE APPELLATE DIVISION
     This opinion shall not "constitute precedent or be binding upon any court."
     Although it is posted on the internet, this opinion is binding only on the
        parties in the case and its use in other cases is limited. R. 1:36-3.


                                              SUPERIOR COURT OF NEW JERSEY
                                              APPELLATE DIVISION
                                              DOCKET NO. A-3768-15T3

HUDSON-TROY TOWERS
APARTMENT, CORPORATION,

        Plaintiff-Respondent,

v.

HEALTHY DOZEN CORPORATION,

     Defendant-Appellant.
____________________________________

              Argued November 9, 2017 – Decided March 9, 2018

              Before Judges Manahan and Suter.

              On appeal from Superior Court of New Jersey,
              Chancery Division, Hudson County, Docket No.
              C-000154-14.

              Steven W. Griegel argued the cause for
              appellant (Roselli Griegel Lozier & Lazzaro,
              PC, attorneys; Steven W. Griegel, on the
              brief).

              Jessica A. Tracy argued the cause for
              respondent (Curcio Mirzaian Sirot, LLC,
              attorneys; Jeffrey A. Sirot, of counsel;
              Daniel W. Heinkel, Paul F. Campano, and
              Jessica A. Tracy, on the brief).

PER CURIAM

        Defendant    Healthy    Dozen    Corporation,     a   unit   owner    of   a

cooperative       and    shareholder     in   plaintiff    Hudson-Troy       Towers
Apartment Corporation, appeals from the April 25, 2016 order that

entered    a    $42,993.44   final   judgment   against   it    in   favor    of

plaintiff.1      We affirm substantially for the reasons set forth in

Judge Hector R. Velazquez's well-reasoned March 18, 2016 written

opinion and statement of reasons issued with the order.

       Plaintiff operates a housing cooperative in Union City known

as Troy Towers.2       Defendant owns shares of stock in plaintiff,

which stock is allocated to a specific apartment unit in Troy

Towers.        In 1987, the prior owner of the stock assigned the

proprietary lease to defendant when it purchased her shares of

stock.3    Neither plaintiff nor defendant has the original or a

copy of the 1987 signed proprietary lease.




1
    Plaintiff has not pursued its cross-appeal.
2
 "A cooperative apartment house is a multi-unit dwelling in which
each resident has an interest in the entity owning the building
and an agreement entitling him to occupy a particular apartment
within the building. The interest in the owner-entity is usually
that of a stockholder and the occupancy agreement is generally
referred to as a 'proprietary lease.'" Plaza Rd. Coop., Inc. v.
Finn, 
201 N.J. Super. 174, 175 (App. Div. 1985).      Cooperative
housing interests, although "hybrid or unique," have been
"characterized as realty" rather than personalty.      Presten v.
Sailer, 
225 N.J. Super. 178, 190 (App. Div. 1988).
3
  The Cooperative Recording          Act   became   effective    after     this
purchase. 
N.J.S.A. 46:8D-1.


                                      2                               A-3768-15T3
      Defendant is owned by Philip Smyth, who lives in Ireland.

He resides in the apartment when he is visiting the United States

and also permits its use by business associates and friends.

     In October 2012, Smyth's apartment sustained water damage

caused by Hurricane Sandy.     The floor tiles in the two bedrooms

and the living room buckled and came loose.    Smyth discovered the

damage in November 2012, when he arrived for a month-long stay.

He testified the apartment could not be used because of the damage.

Smyth told the manager of the Towers,

            well, look, I can't use it. And she said she
            knew . . . . I said to her, look, since I'm
            not going to use it this month and since there
            are people there in desperate straits with
            this damage, how long do you think it will be
            before you get to my unit. And she said two
            months. And I said, that's fine.

He said he "accepted they wouldn't do the work for two months."

     In February 2013, plaintiff's insurance claim was accepted,

allowing repairs to the apartment.      Defendant was advised that

repair work had been scheduled but that the contractor was backed

up a few weeks to April 2013, because of the number of units

affected.    Thereafter, plaintiff advised defendant the work was

completed on April 25, 2013.     Defendant contended at trial that

the repairs were only temporary in nature.

     Smyth stayed at the apartment around April 12, 2013, noting

there was a problem with the floor in the guest bedroom but

                                  3                          A-3768-15T3
otherwise the "lounge and his bedroom [were] basically o.k." Karen

Polly, an employee of Smyth's, stayed at the apartment in May

2013.   She noticed evidence of water leaks near the ceiling or

windows and some wall dampness but did not mention any issues with

the floors.    Another employee of Smyth's, Brenda Flood, stayed at

the apartment with family members in late May 2013.   She arranged

for a significant cleanup of the apartment, advising that she left

the apartment in "very good shape."    She testified the apartment

"was livable in."

     Flood testified that the floors buckled again in September

2013.   Plaintiff contended that the HVAC unit caused this damage,

which was defendant's responsibility under the proprietary lease.

Although Flood believed the buckling occurred because the earlier

repairs had only been temporary, she paid $700 "to put the floor

down again."

     In April 2013, defendant stopped making monthly payments

because of the condition of the apartment and did not resume

payments until May 2014, when a new company took over management

of Troy Towers.      Plaintiff demanded payment of the arrears;

defendant requested an abatement.

     In October 2014, plaintiff filed a complaint in the Chancery

Division, seeking a declaration that defendant was in violation

of the "[p]roprietary [l]ease and [b]y-laws" and seeking costs and

                                  4                        A-3768-15T3
attorney's fees.      Following a bench trial, the trial court entered

a final judgment on April 25, 2016, against defendant for a total

of $42,993.44, which included $7,048.98 in attorney's fees.                 The

parties   did   not    dispute    the   dollar   amount   of    the   claimed

maintenance fees, late fees or interest charges.

     In its written decision, the court found that defendant was

assigned the proprietary lease for the apartment in 1987 after it

purchased    the   prior   owner's      shares   of   stock    in   plaintiff

corporation and was "provided with copies of the lease and the

[c]orporation [b]y-laws."        Owners of membership shares are subject

to the by-laws of the cooperative and the terms of a proprietary

lease.    The court found that under the by-laws, plaintiff's Board

of Directors adopted a form of a proprietary lease for the leasing

of all the apartment units in Troy Towers.            That lease required

the monthly payment of a maintenance amount equal to plaintiff's

cash requirement for the year allocated to the shareholders based

on their number of shares.       Failure to pay the monthly maintenance

fee required the payment of interest as "additional rent."                     A

default in payment that was not cured in a month after notice

could result in the termination of the lease.             The court noted

that paragraph 4b of the proprietary lease provided:

            [I]n case the damage resulting from fire or
            other cause is so extensive as to render the
            apartment partly or wholly untenantable, or

                                        5                             A-3768-15T3
           if the means of access thereto are destroyed,
           the rent hereunder shall proportionately abate
           until the apartment is again rendered wholly
           untenantable or the means of access is
           restored.

     The court rejected defendant's claim that it was entitled to

an abatement of the maintenance payments.    Judge Velazquez found

that "[f]irst, Smyth[] agreed to delay the repairs to defendant's

unit until after the restoration of other damaged apartments[,]"

where people lived.   Next, he found that "the evidence established

that the company hired to perform the repairs was not able to

commence the repair work on the defendant's apartment until April

2013."    Under section 29 of the proprietary lease, there was no

rent abatement if the repairs were delayed "due to difficulty

. . . in securing supplies or labor or other causes beyond the

Lessor's control."     The court found the repairs were delayed

because of the contractor's "inability to provide the labor or

manpower to repair all of the damage caused by the storm" and

found the delay in completing the repair work was "beyond the

control of the plaintiff."

     Although Judge Velazquez agreed the "shareholder and lessee

of a cooperative apartment could have an arguably valid reason for

not paying rent" under the case of Marini v. Ireland, 
56 N.J. 130

(1970).   Here, defendant did not establish "that it has the right

to withhold the rents."

                                 6                          A-3768-15T3
        On appeal, defendant contends the court erred by admitting

into evidence certain documents that included a copy of an unsigned

assignment agreement, a copy of the 2014 amendment to the by-laws,

and an unsigned copy of a proprietary lease from 2010.                   Defendant

further argues that the court erred by not granting an abatement

or credit and it sought dismissal based on an alleged insufficiency

of the pleadings.        We find no merit in these arguments.

        We    review   challenged      evidentiary    rulings      for   abuse    of

discretion.       Griffin v. City of E. Orange, 
225 N.J. 400, 413

(2016).       To find an abuse of discretion, the evidentiary ruling

must be "so wide off the mark that a manifest denial of justice

resulted."      Ibid. (quoting Green v. N.J. Mfrs. Ins. Co., 
160 N.J.
 480, 492 (1999)).

        Generally "[t]o prove the content of a writing . . . the

original writing is required" unless an exception exists by court

rule or statute.             N.J.R.E. 1002.     Under N.J.R.E. 1004, "[t]he

original [of a writing] is not required and other evidence of the

contents of a writing" is admissible if the original contract was

"lost    or    destroyed,"      "not   obtainable,"   or   "in     possession     of

opponent."

        Defendant contends the court erred by permitting in evidence

unexecuted copies of documents. However, defendant did not dispute

that    in    1987,    his    corporation     purchased   shares    of   stock    in

                                          7                               A-3768-15T3
plaintiff, that these were assigned from the prior owner or that

there were by-laws and a proprietary lease that applied to the

apartment unit.

        None of the parties had the original or a copy of the

proprietary lease.      Michael Canfield, the building manager for

Troy Towers, testified that the lease document proffered at trial

was the sole form of proprietary lease used at Troy Towers.               He

stated it was not likely this document was different from the

proprietary lease used in 1987 because it would take an amendment

of the by-laws to change the form.          Each shareholder signed a

proprietary lease and maintained the original.        We do not find the

court    mistakenly   exercised   its   discretion   in   permitting   into

evidence an unsigned form lease, by-laws and assignment.                The

trial court stated that Smyth acknowledged he had been "given or

had reviewed, either before or after the closing of title," the

types of documents that were introduced.

        Defendant also contends that the court erred by entering a

judgment against it, claiming it should have received an abatement

for the period of time that the apartment was untenantable.               We

afford a deferential standard of review to the factual findings

of the trial court on appeal from a bench trial.               Rova Farms

Resort, Inc. v. Inv'rs Ins. Co., 
65 N.J. 474, 483-84 (1974). These

findings will not be disturbed unless they are "so manifestly

                                    8                             A-3768-15T3
unsupported by or inconsistent with the competent, relevant and

reasonably    credible   evidence   as   to   offend    the   interests    of

justice."     Id. at 484 (quoting Fagliarone v. Twp. of N. Bergen,


78 N.J. Super. 154, 155 (App. Div. 1963)).             However, our review

of a trial court's legal determinations is plenary.             D'Agostino

v. Maldonado, 
216 N.J. 168, 182 (2013) (citing Manalapan Realty,

LP v. Twp. Comm. of Manalapan, 
140 N.J. 366, 378 (1995)).

        Here, there was substantial evidence to support the court's

findings.     Although Hurricane Sandy damaged the apartment at the

end of October 2012, defendant agreed that Troy Towers could have

two months to repair the damages.        Defendant did not dispute that

the insurance claim was approved in February 2013, the contractor

was not available until April 2013, and that repairs were made

then.    Although defendant contends that the repairs were temporary

and that more work was needed on the apartment, it was not

untenantable in April 2013, because Smyth stayed there in April

and other employees stayed at the apartment in May 2013.                  The

proprietary lease contemplated the situation where repairs were

delayed because of issues outside of plaintiff's control.            We are

satisfied the trial court's decision that the delay was beyond

plaintiff's control and that no abatement was required, was based

on adequate, substantial and credible evidence.



                                    9                              A-3768-15T3
       Even if there were a habitability claim under Marini4 for a

shareholder and tenant of a cooperative unit, see Harrison Park

Owners, Inc. v. Dixon, 
254 N.J. Super. 605, 611 (App. Div. 1992)

(providing that habitability arguments "could provide sufficient

justification for withholding the monthly maintenance charge"),

we agree with Judge Velazquez that this defendant did not show any

basis for an abatement given the agreement to wait two months for

repairs and then the unavailability of the contractor.

       Affirmed.




4
    
56 N.J. at 130.

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